Correlation Between Lendlease Global and Fomento Economico
Can any of the company-specific risk be diversified away by investing in both Lendlease Global and Fomento Economico at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lendlease Global and Fomento Economico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Global Commercial and Fomento Economico Mexicano, you can compare the effects of market volatilities on Lendlease Global and Fomento Economico and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lendlease Global with a short position of Fomento Economico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease Global and Fomento Economico.
Diversification Opportunities for Lendlease Global and Fomento Economico
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lendlease and Fomento is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Global Commercial and Fomento Economico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Economico and Lendlease Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lendlease Global Commercial are associated (or correlated) with Fomento Economico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Economico has no effect on the direction of Lendlease Global i.e., Lendlease Global and Fomento Economico go up and down completely randomly.
Pair Corralation between Lendlease Global and Fomento Economico
Assuming the 90 days horizon Lendlease Global is expected to generate 1.72 times less return on investment than Fomento Economico. But when comparing it to its historical volatility, Lendlease Global Commercial is 5.3 times less risky than Fomento Economico. It trades about 0.09 of its potential returns per unit of risk. Fomento Economico Mexicano is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,681 in Fomento Economico Mexicano on August 31, 2024 and sell it today you would earn a total of 1,258 from holding Fomento Economico Mexicano or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 75.94% |
| Values | Daily Returns |
Lendlease Global Commercial vs. Fomento Economico Mexicano
Performance |
| Timeline |
| Lendlease Global Com |
| Fomento Economico |
Lendlease Global and Fomento Economico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease Global and Fomento Economico
The main advantage of trading using opposite Lendlease Global and Fomento Economico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease Global position performs unexpectedly, Fomento Economico can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fomento Economico will offset losses from the drop in Fomento Economico's long position.| Lendlease Global vs. Boston Omaha Corp | Lendlease Global vs. National CineMedia | Lendlease Global vs. Entravision Communications | Lendlease Global vs. Live Ventures |
| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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